A recent analysis reveals that the Saskatchewan government’s plan to revamp its coal-fired power plants could potentially reach a staggering $46.4 billion in expenses over the next two decades. This cost projection surpasses the earlier estimation of $26 billion over 25 years, as indicated in leaked internal documents from SaskPower.
Brett Dolter, an associate professor at the University of Regina specializing in economics, conducted the analysis to determine the financial implications of Saskatchewan’s strategy to transition from coal-fired plants to nuclear power and the implementation of Small Modular Reactors (SMRs). Dolter’s research demonstrates that retaining the coal plants and introducing a mix of natural gas facilities and renewable energy solutions, as initially planned by the province before its policy reversal in early 2025, would be a more cost-effective and environmentally friendly alternative.
According to Dolter, incorporating carbon pricing into the equation significantly highlights the savings. Without carbon pricing on heavy emitters, the expense of persisting with coal could amount to $30.2 billion over the next two decades. However, factoring in carbon pricing would reduce the cumulative cost to $46.4 billion, aligning with Ottawa’s carbon pricing framework signed with Alberta earlier this year.
Despite the clear financial implications of the current path chosen by Saskatchewan, Dolter refrained from speculating on the government’s rationale for proceeding with the costly decision. When approached for comment on Dolter’s analysis, the provincial government responded with a statement emphasizing the importance of reliable and affordable electricity for the province’s growth.
The government’s decision to extend the lifespan of the coal-fired plants contrasts with previous commitments to transition away from coal in line with federal regulations. Mayor Tony Sernick of Estevan expressed concerns about the potential impact on the city’s population if the coal plants were shut down, highlighting the significance of the plants for the community’s economic stability.
Moreover, Saskatchewan’s divergence from federal clean electricity regulations and carbon pricing may expose the province to legal risks. Dolter warned that pursuing refurbishments on the coal plants while disregarding established regulations could lead to significant financial loss if legal challenges force the closure of the plants after substantial investments have been made.